Press Release
May 2, 2008

Pia outraged by reports Hanjin offered P400-M contract to mayor in Misamis Oriental for construction of shipyard without permits

Senator Pia S. Cayetano today expressed outrage over reports that Korean investor Hanjin Heavy Industries and Construction Corp. allegedly offered a P400-million contract to a municipal mayor in Misamis Oriental, in exchange for a reversal of his order stopping the construction of a $2-billion shipyard which still hasn't secured the necessary permits.

"I am outraged to hear that Hanjin offered such favor to the local official to allow them to continue construction even without first securing a municipal building permit and environmental compliance certificate (ECC), among others. These are basic requirements under the law, regardless of whether you're a local or foreign investor," said Cayetano, referring to the recent revelation made by Tagoloan Mayor Paulino Emano about the P400-million contract offered to him by Hanjin.

"But what I found more revealing is when President Arroyo even scolded Mayor Emano [last Wednesday in Cagaytan de Oro City] for standing his ground, even if he only acted in accordance with his duties as an elected public official. The President also allegedly ignored him when he reported the matter about Hanjin's offer," Cayetano, Senate Environment and Natural Resources Committee Chair, added.

"If these reports are true, then there are clearly three disturbing trends here."

She continued: "The first points to a trend showing Hanjin's utter refusal to abide by our laws, as it has been involved in a similar controversy in Subic. Second is government's apparent tolerance of violations of national and environmental laws allegedly committed by this investor. And the third, and most disturbing, is the President playing deaf and dumb again on what could possibly be another bribery attempt brought to her attention."

Cayetano noted that Hanjin is also under fire by environmentalists for constructing two condominiums beginning January 2007 inside the protected Subic forest reserve without an ECC. Hanjin applied for an ECC only in March 2007 and was granted the same by the Subic Bay Metropolitan Authority (SBMA) in July 2007. By then, Hanjin's 22-storey condominium was already eight floors high, while the 12-storey condominium was already four floors high.

On the third trend, she recalled an instance at the Senate's NBN-ZTE hearing when former NEDA Secretary Romulo Neri reported to the President about a P200-million bribe by former Comelec Commissioner Benjamin Abalos in exchange for NEDA's approval of the project. It was not clear how the President acted on the report as Neri invoked executive privilege to conceal the information from senators.

Hanjin had planned to operate a $2 billion shipyard that would extend from Tagoloan to Villanueva in Misamis Oriental. Its training center alone would occupy eight hectares, while the planned shipyard would be on a 70-hectare property in Tagoloan and on a 400-hectare property in Villanueva.

"We should send a clear message to investors that they are welcome but they must abide by our laws. If they do not want to follow our laws then they should leave our country," she concluded.

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